CITING stiff international competition and increased costs, BHP Billiton has announced a decision to temporarily suspend operations at its TEMCO manganese alloy facility in George Town, Tasmania.
“Recently, there has been further erosion of [the company’s] international competitiveness due to the strong Australian dollar and steady increases in input costs, including in reductants and electricity,” BHP Billiton Manganese president Tom Schutte said in a statement.
“At the same time, manganese alloy markets in Europe and North America have been weak and global prices remain low. “While measures have been taken to make the operation as cost effective as possible, these have not been sufficient to counter shifts in the market, increased costs of production, or operating losses.”
BHP Billiton Manganese Australia president Bryan Quinn said the company would review the long term future of the operation during a three month consideration period.
“During this time there will be no change in the employment status of TEMCO-based permanent employees – however, contracting partners will be reduced to those critical to essential activities,” Mr Quinn said. “If any decision is made to reduce the number of permanent employees following the review, we will explore all options in order to preserve jobs, including redeployment opportunities within BHP Billiton.” BHP is the world’s largest producer of manganese, but its business has been affected by weak market conditions exacerbated by large ore stockpiles at Chinese ports. Meanwhile, unions have threatened months of rolling strikes at the company’s BHP Billiton Mitsubishi Alliance (BMA coalmines in Queensland, as the company continues to resist union attempts to limit the use of contractors and introduce extra breaks for staff.
About 3000 workers walked off the job at seven Bowen Basin mines for more than a week in February.
Construction, Forestry, Mining, and Energy Union (CFMEU) district president Stephen Smyth said the union was prepared to take ongoing strike action – potentially for the next three months – to pressure the company into an acceptable agreement.
The BMA mines have a combined annual capacity of 58 million tonnes; the week of strike action is estimated to have cost the Alliance more than 1mt in lost coal production.
By Reuben Adams